NBU Keeps Discount Rate At 25%

The National Bank of Ukraine (NBU) kept the discount rate at 25%.

This is stated in the message of the NBU, Ukrainian News Agency reports.

Inflation in Ukraine is slowing down for the second month in a row - in February to 24.9% in annual terms.

The decline in inflation started earlier and is happening faster than the National Bank predicted.

This, in particular, was facilitated by an increase in the supply of food and fuel, the rapid recovery of the energy system after the Russian attacks, and weaker consumer demand.

The growth of consumer prices is also largely restrained due to the fixation of the official exchange rate of the hryvnia and tariffs for housing and utility services.

Previous measures of the National Bank, including keeping the discount rate at 25%, increasing mandatory reserve standards, introducing new deposit products, as well as calibrating currency restrictions, contributed to the strengthening of the hryvnia in the cash segment of the market.

This affected the improvement of inflation and exchange rate expectations.

The complete cessation of emission financing of the budget from the beginning of the year also had a positive impact.

Despite this, inflation is still high and pressure on business costs is significant.

Certain factors that restrained inflation over the past few months may be of a short-term nature.

Thus, the increase in food supply and the faster stabilization of the fuel market were largely due to the warm winter.

As Ukrainian News Agency earlier reported, on October 28, 2016, the NBU reduced the discount rate from 15% to 14%, in December 2016 and January 2017 - it was kept at 14%, in April 2017 - it was reduced to 13%, in May 2017 - it was reduced to 12.5%, in October - increased to 13.5%, in December 2017 - to 14.5%, in January 2018 - to 16%, in March 2018 - to 17%, in July 2018 - to 17.5%, in September 2018 - to 18%, in April 2019 - reduced to 17.5%, in July 2019 - to 17%, in September - to 16.5%, in October - to 15.5%, in December - to 13.5%, in January 2020 - to 11%, in March - to 10%, in April - to 8%, in June - to 6%, in March 2021 - increased to 6.5%, in April - to 7%, in July - to 8%, in September - to 8.5%, in December - to 9%, in January 2022 - to 10%, in June 2022 - to 25%.

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